Kentucky ®
FALL 2018
A publication of Kentucky REALTORS®
6 tips for keeping your marketing legal Meet the KY Real Estate Commission 5 things prospects can’t say no to The seller’s affidavit Powerful video strategy to easily earn up to 2682% ROI
kyrealtors.com
CONTENTS Volume 11, Number 2, FALL 2018
IN THIS ISSUE
A publication of Kentucky REALTORS® President | Steve Cline REALTOR® Association of SKY Berkshire Hathaway Home Services Partners Realty, Bowling Green President-elect | Rip Phillips Greater Louisville Association Keller Williams Realty, Louisville Treasurer | Lester Sanders Greater Louisville Association Semonin REALTORS®, Louisville Treasurer-elect | Charles Hinckley Heart of Kentucky Association Network Realty, Elizabethtown CEO | Steve Stevens, CCE sstevens@kyrealtors.com Kentucky REALTORS® members should always send address changes to their local board/association first. Subscription rates: $10 per year (included in dues) for members, $25 per year for non-members. All articles represent the opinions of the authors and do not necessarily represent the opinions of Kentucky REALTORS® and should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by Kentucky REALTORS® and its authors. Reproduction prohibited without permission. Copyright© 2018. Kentucky REALTORS®, Inc. All rights reserved.
Address letters and inquiries to: Kentucky REALTORS® 2708 Old Rosebud Road, Suite 200 Lexington, KY 40509 TF 800.264.2185 T 859.263.7377 F 859.263.7565 www.kyrealtors.com email: kyrealtors@kyrealtors.com
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Meet the Kentucky Real Estate Commission 5 Things prospects can’t say no to 4 Strategies for sticking to your business plan 7 Reasons your real estate team will fail The Seller’s Affidavit REALTOR® safety is a year-round concern 5 Staging tips for the uutdoor living room Powerful video strategy to easily earn up to 2682% ROI 6 Tips for keeping your marketing legal
REGULAR FEATURES 4 5 6 14 18 22 24 25 28 30
REALTOR® News President’s Message Tools You Can Use Legislative Update Education Local Association News By the Numbers Housing Stats CEO Message A Day in the Life of...
ON THE COVER With the Kentucky Dam in the background, this body of water was created in 1944 by the Tennessee Valley Authority’s impounding of the Tennessee River. It is the largest artificial lake by surface area in the United States east of the Mississippi River, with over 2,000 miles of shoreline. Go to the KYR Facebook page (facebook.com/kentuckyrealtors) – please like the page if you haven’t already – locate the cover photo and comment with the name of the landmark for a chance to win a free online course with Jason Vaughn, courtesy of the Kentucky REALTOR® Institute (KRI). If you would like to submit a photo for the magazine cover (Spring 2019 issue), send photographs to kyrealtors@kyrealtors.com. Photos must be high resolution and be Kentucky specific – landmark, destination, etc. FALL 2018 | Kentucky REALTORS® | 3
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REALTOR® NEWS
Kentucky REALTORS® participating in Salvation Army Ring Day Friday, December 7 KYR is joining the Salvation Army for a Ring Day on December 7. What started with two state REALTOR® Associations in 2010 has since grown into a nationwide effort coordinated between 30+ states across the US making it one of the largest volunteer efforts in Salvation Army history. The event gives REALTORS® an opportunity to support a cause that is dear to them: housing. Kettle donations also fund additional Salvation Army programs such as food, rehabilitation and youth activities. And, best of all, the dollars raised at each kettle stay in the local community. To learn more about the Ring Day or to register to participate, visit kyrealtors.com/cs.
Step up to the plate for real estate Are you interested in serving the real estate industry at the state level? Kentucky REALTORS® is seeking nominations for several leadership positions for 2019. The information regarding the openings, terms and voting information can be found on the website at kyrealtors.com/elections. The deadline for nominations is September 14 and elections will take place at the 2018 Annual Convention & Expo. If you need additional information or would like to discuss, please contact Julie Johnson, Director of Professional Standards and Governance, at 800.264.2185 or at jjohnson@kyrealtors.com.
Open Positions:
President-Elect (1 position, 1-year term) Treasurer-Elect (1 position, 1-year term) Senior Vice President (3 positions, staggered terms) At-Large Director (3 positions, 3-year term) Region Director for 2, 4 & 6 (3 positions, 2-year term) At-Large Delegate (3 positions, 3-year term) NAR Director (1 position, 3-year term) NAR Region Vice President, Region IV (1 position, 1-year term 12/1/2020-11/30/2021)
Follow KYR on Social Media KYR has posted its social media links on the home page of its website so members and consumers can follow all the things going on with the Association. Keep up with KYR on a real time basis – legislative updates, industry news, business tips and much more – visit www.kyrealtors.com. 4 | kyrealtors.com
Members of the 2018 LeadershipKYR class participated in the KYR Day of Service on August 9 by volunteering at the Buenger Boys & Girls Club in Northern Kentucky. They cleaned and organized the center and landscaped the outside in preparation for kids arriving back when school starts.
LeadershipKYR Class of 2019 Applications are being accepted from KYR members who want to join the ranks of some of the most successful REALTORS® from around the state. The program leads participants through several retreats and provides skill development in leadership along with team-building exercises, goal setting, personal profile analysis, network building and improving communication skills. At graduation, members receive a designation for the program, which is the only state specific real estate designation in Kentucky. Check the website at www.kyrealtors.com/lkyr for more information, testimonials, objectives and videos about the program.
Want to serve on a KYR committee in 2019? Members who want to be considered for a committee with KYR can sign up online. Kentucky REALTORS® relies on the skills and interests of a broad cross-section of the membership, and KYR wants to provide members with many opportunities to develop their professional and leadership skills. By volunteering to serve on a committee, member involvement group or task force, you can help set the course for YOUR association. The new website feature allows members to log in and select the committees for which they want to be considered. Visit kyrealtors. com and look under "Members" for the committee sign-up link. Once there, it’s a drag and drop process to list the committees in order of interest. Before the end of the year, appointments will be made and notifications will be sent to each member selected for a 2019 committee.
Affinity Partners As a benefit of membership with Kentucky REALTORS®, members are eligible to receive discounts and added value on businessrelated products and services from a number of leading industry partners. To learn more about each of companies listed, visit kyrealtors.com/discounts.
PRESIDENT'S MESSAGE
KYR volunteers tackled many initiatives for our industry in 2018
L
ike most newly elected presidents, when I assumed the presidency of the Kentucky REALTORS® at the start of the year, I had some specific goals in mind that I wanted to achieve and work I thought we should accomplish. My friends and colleagues know that I don’t shy away from tackling tough projects and issues. It makes me appreciate even more that hard work and dedicated effort usually pays dividends with good results.
have worked together to identify and address ways to raise the bar for real estate professionals. In June, the entire Commission traveled to Owensboro to our Summer Meeting to interact with our members. We enjoyed hosting them and having the Commission conduct their monthly meeting at our event. I specifically want to acknowledge Public Protection Cabinet Secretary David Dickerson, Kentucky Real Estate Authority Executive Director H.E. Corder, KREC Chairwoman Lois Ann Disponett and the rest of the Commission members for their STEVE CLINE In my mind’s eye, I envisioned the way I thought openness and outreach to KYR as we develop an my year would go, but with less than half of that even stronger partnership between us…and you can read more year left to go at the time of this writing, I smile when I think of how about the Commission later in this issue. many new things came onto our plate and some of the detours we took that I had not envisioned! I am proud of the work of the To deliver meaningful programs and services, improve many volunteers who have participated on several Presidential operations and ensure the strongest possible representation of Appointed Groups created to improve our industry in Kentucky. the members of the association requires adequate resources. Both I also thank our great KYR staff who supported these individuals NAR and KYR have developed strategic initiatives to accomplish in their work on initiatives such as creating uniform statewide this work. To support these initiatives, both organizations’ purchase and listing contracts, developing new education boards of directors also adopted dues increases to provide the for appraisers, providing support to commercial real estate proper funding levels. At NAR, a $35 dues increase will create professionals and providing input to the Kentucky Real Estate more than $35 million to help NAR define measurable increases Commission to improve their website. My special thanks to Janie in professionalism in the industry, increase the organization’s Wilson, Larry Disney, Jim Broadwater, Randy Newsome and Stacey influence in the legislative, regulatory and political arenas with Fergerson for their leadership in chairing these PAGs. new REALTOR® Party programming, support their transaction management platform and pay for critical upgrades to their It was with great pride that I attended the NAR Legislative headquarters. Meeting this year in Washington, DC and heard Kentucky’s name called, as we reached a new milestone for our association in KYR’s Board of Directors adopted a $20 increase that will winning for the first time the NAR President’s Cup for our work support new staff to assist our education and advocacy work, in advocacy and political action. To be one of only 16 states to invest in a new member-friendly membership data management achieve this honor is no small feat and I am happy to say that many individuals are working hard right now to see that we repeat! Thank system, support member outreach by association leaders to better connect and engage members statewide with their association and you to everyone who contributes to RPAC and responds when the ensure that we deliver high quality state meetings for our members call goes out to make your voice heard to our elected officials on to attend. our important industry issues and my special thanks are extended to RPAC Chair Mike Inman, Immediate Past President Mike Becker, In closing, I am confident in the future of our association which David Earls and Pamela Gregory for their leadership and a job well I believe is very bright. We are now more than 11,000 members done. Like an insurance policy, RPAC and our grassroots action strong and have earned the respect of government officials, as well protect our industry and businesses. PLEASE continue to do so! as our peers – we are a force to be reckoned with! With so much accomplished, there is still so much left to do. My strongest desire We have had a productive year on many fronts. Through is for you to be involved in this association and give back some perseverance and strong fiscal management, we were able to of your talent and treasure to improve your industry. I am most pay off our headquarters building in Lexington. Importantly, grateful to have had the opportunity to serve as your president this we renewed a strong and positive working relationship with the Kentucky Real Estate Commission. A frequent and steady dialogue past year and I look forward to continuing my involvement for our has occurred by our leadership and staff with them all year, as we industry here as well as at the local and national levels.
STEVE CLINE
2018 PRESIDENT, KENTUCKY REALTORS®
TOOLS YOU CAN USE Social media influences home buying for Millennials According to a survey from the National Association of REALTORS® (NAR), millennials make up 65% of all first-time buyers. In another survey from Bank of America, they were asked how they feel when they see pictures of homes purchased by other people on social media and here is what the data revealed: • A third of Millennials (and 27% of all first-time buyers) think, “If they can buy, why can’t I”? • A quarter (and 21% of all first-time buyers) fear they’re missing out. • Nearly a quarter (and 18% of first-time buyers) mutter to themselves, “It’s time to grow up and buy.” • And 23% (and 16% of first-time buyers) are jealous of the homes bought by their friends and acquaintances.
Home values can be affected by these little-known factors Location, crime, and neighborhood comps can certainly affect a home’s value. But what are some of the more invisible factors that influence sales prices? HouseCanary, a data analytics real estate platform, analyzed more than 1,500 counties to identify the top five hidden factors that influence home values. They pinpointed the following: The view angle from the backyard: The maximum angle that opens up to scenery or nature from your backyard (measured from no scenic view at all from your backyard to 180 degrees, indicating that the view is scenic from every angle). Frontage length: The length in feet of the street-facing side of the home’s lot. (Frontage length was tied to an increase in home values.) Backyard exposure to neighbors: The measurement of how easily neighbors can see into a home and backyard. Privacy from neighbors was found to be an asset. Privacy: Researchers factored in backyard slope, distance to neighbors, home density, and other metrics to determine a privacy score. (The more private, the more desirable.) Backyard slope: Researchers measured the slopes of the backyards to determine the influence. Homes with downhill-sloping backyards tend to be more desirable than homes with backyards that slope uphill.
Follow Kentucky REALTORS® on Facebook and Twitter KYR has posted its Twitter feed and Facebook page link on the home page of its website (kyrealtors.com) so members and consumers can follow all the things going on with the association. Keep up with all things KYR on a real-time basis – legislative updates, industry news, business tips and much more! Or you can visit the pages directly: facebook.com/ kyrealtors or twitter.com/kyrealtors. 6 | kyrealtors.com
Top reasons millennials gave to owning rather than renting A 2014 survey by Fannie Mae found that the majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons. Many young renters in the survey appear to be on the brink of homebuying, and 49% said their next move would likely be to own a home. Here are the top 5 reasons potential buyers, born from 1981 to 1997, gave for wanting to move into homeownership: • • • • •
Having control over what you do with your living space - 93% Having a sense of privacy and security - 90% Living in a nicer home - 81% Feeling engaged in your community - 75% Having flexibility in future decisions - 53%
Asked what they believed were the biggest obstacles to getting a mortgage, millennial renters gave these answers, in order (although the data analyzed by NerdWallet revealed these reasons may be more perception than reality): • Insufficient credit score or history • Affording the down payment or closing costs • Insufficient income for monthly payments • Too much existing debt
DID YOU KNOW: U.S. millennials total 66 million individuals and 24 million independent households and are expected to form
20 million new households by 2025.
How housing has changed over 36 years According to Veritas Urbis Economics, who analyzed census data from 1981 to 2017, young couples purchasing their first home are not the average homebuyer these days. It is, in fact, females who made up nearly half of all homebuyers in 2017, a significant increase over the last 36 years. Here is some additional data from the report: • The share of single women homebuyers is at an all-time high, hitting 18.9 percent in 2017, an increase of 9.8 percent from 1981, due to improved education and work opportunities over that time period. • In 2017, 25.1 percent of women had at least a bachelor’s degree, compared to 11.1 percent in 1981. Additionally, 42.5 percent of the workforce is comprised by women, compared to 35.3 percent in 1981. • Only 40.7 percent of homes had children in 2017, down 10.4 percent from 1981. The report noted that females may be buying more homes because they are getting married and having children later, or not at all. • Single households have increased to 21.2 percent from 15.3 percent in 1981. Single homebuyers increased 38.4 percent. • Baby boomers, those older than 55, represented 27.8 percent of homebuyers in 2017, up from 11.7 percent of that age bracket in 1981, while millennials represented 33.7 percent in 2017, down from 52 percent of that age bracket in 1981. The share of baby boomers buying grew 72.7 percent, compared to 1981 of that age bracket. • The 35-54 year old demographic, also known as Generation X, makes up the largest percentage of homebuyers, increasing by 20.5 percent since 1981.
RPR: Find your next listing with these actionable farming tactics Thanks to record setting low inventories, today’s REALTORS® are taking the reins, knowing they must create their own success by digging deep into solid, sustainable marketing campaigns that generate new business and position them as long-term market experts. Real estate farming is possibly the most proactive position an agent can take to build inventory. The method includes a series of steps that analyze a given neighborhood, ZIP code or market area to determine how many homes are most likely to sell, at what price range, and how long they will be on the market. A good farming strategy involves working through a set of five exercises to determine the area’s viability.
Average price
Predicting your average commission per transaction will determine how many properties you will need to close to make a profit in your farm area. From your area, pull all of the sold listings over the past two years to calculate the average price range of homes sold and then calculate what your commission would have been. Then jot down the number of closings you need to succeed.
Amount of homes
Your number of needed closings (from above), needs to be proportional to the number of homes in the farm area and the area’s turnover rate (which we’ll address next). Real estate experts recommend those just starting out choose a neighborhood that has up to 500 homes to make the effort worth the investment. That number is negotiable though as you don’t want to choose an area so large that your marketing effort is spread too thin to make a difference.
Turnover
One of the most important aspects of identifying a farm area,
Buyers looking for this home According to a new realtor.com® survey of more than 1,000 home shoppers, here is what buyers are looking for in a home: 44 percent of respondents say they want a three-bedroom home. 93 percent say they want a home with at least two bathrooms. A garage is wanted by 27 percent, ranking it as one of the most important home features, above an updated kitchen (24 percent) and open floor plan (20 percent). Privacy is wanted by more than 20 percent of those 55 and older saying that having a space of their own is their main goal, followed by the physical comforts and stability of homeownership. 17 percent of millennial buyers placed the highest weight on family needs when house hunting, followed by stability (14 percent) and personal expression (13 percent). Only 12 percent of buyers younger than 55 cited privacy as their chief priority. 23 percent of buyers between the ages of 18 and 34 reported rising rents as a trigger for their recent home purchase, more than any other option
turnover rate, is a simple calculation that helps to identify whether the area has enough sales activity to sustain your prospecting campaign. Most agents look for areas with a 7% or higher turnover rate. For example, an area with 500 residences but only 25 sales in the past year only yields a mere 5 percent turnover rate — not high enough to earn a decent profit even though there are so many homes in the area. To figure out the turnover rate in your potential area, divide the number of homes in your farm area by the number of homes sold in the last 12 months years.
Months of Inventory
Another important measure of potential success is “months of inventory,” a calculation used to indicate how long it would take for the homes currently available to sell at the market’s present pace. The figure is primarily used to help REALTORS® predict how many listings are needed to keep their pipelines active over a given time period. A healthy market usually has between five and six months supply of inventory. To calculate months of inventory, from your farm area, divide the number of active listings on the market by the number of homes sold per month on average during the previous 12 months.
Competition
Lastly, knowing who is currently marketing to your potential farm area can lead to a make-or-break campaign. If one agent dominates the area, you may want to look elsewhere. An area with a variety of agents will more than likely be more open to a new face. Ready to launch your next farming campaign? Learn how by downloading the free eBook from Realtors Property Resource® (RPR®), The RPR Guide to Geographic Farming (blog.narrpr.com/ebook/ geographic-prospecting/).
Staging proves to be an important step in getting a property sold Sixty-two percent of sellers’ agents say that staging a home decreases the amount of time a home spends on the market, according to the NAR 2017 Profile of Home Staging, www.nar. realtor/reports/profile-of-home-staging. According to the report, which is in its second iteration, nearly two-thirds of sellers’ agents said that staging a home decreases the amount of time the home spends on the market, with 39 percent saying that it greatly decreases the time and 23 percent saying it slightly decreases the time. Sixteen percent of sellers’ agents believe that staging either greatly or slightly increases a home’s time on the market, while 8 percent believe that it has no impact. Seventy-seven percent of buyers’ agents said that staging a home makes it easier for buyers to visualize the property as their future home, and 40 percent are more willing to walk through a staged home they first saw online. However, 38 percent of buyers’ agents said that staging positively affects a home’s value if the home is decorated to the buyer’s taste, meaning that a home’s staging should be designed to appeal to the largest number of potential buyers. View more at www.nar.realtor/reports/profile-of-home-staging. FALL 2018 | Kentucky REALTORS® | 7
Meet the Kentucky Real Estate Commission As an agency of the Commonwealth of Kentucky, the Kentucky Real Estate Commission is empowered under Chapter 324 of the Kentucky Revised Statutes to regulate state licensing and education of real estate brokers and sales associates and to safeguard and protect the public interest. The Commission strives to elevate the real estate industry to the highest standards possible through communication, education and the latest technology.
H. E. Corder II | Kentucky Real Estate Authority (Executive Director) Appointed: March 2018 Mr. Corder started his first business at age 15, and has been working as a co-owner in a family business since that time. His personal business experience includes financial services, real estate, and retail antique and auction businesses. He is also a previous owner and administrator of several primary care and urgent care facilities. Most recently, Corder has served as an independent contractor, principle auctioneer and broker associate with Ford Brothers Inc. "It is my passion to fulfill the great and needed changes in my home state of Kentucky - that is what drives me. My goal in leading the Kentucky Real Estate Commission is to raise the educational quality and professionalism of the industry and reduce any regulations that restrict trade in the industries within the Authority." - H.E. Corder II
Lois Ann Disponett | Lawrenceburg, KY (Chair) Appointed: December 2016, Term expires: November 2019 Commissioner Disponett first obtained her sales associate license in August 1, 1976. On January 3, 1978, she obtained her broker’s license. A few months later, she opened her own office and became the principal broker of Lois Ann Disponett Real Estate Company. Along with her real estate business, she has been involved in the development of both residential and commercial property in the Anderson County area for the last 41 years. She obtained her Associate Degree in Real Estate from the Lexington Technical Institute in 1977. In June of 2002, Disponett, along with four other individuals, formed and opened Century Bank in Lawrenceburg.
Joe Hayden | Louisville, KY (Member) Appointed: November 2017, Term expires: October 2020 Commissioner Hayden pursued professional aviation in the early 2000s, ultimately becoming the operations manager of a large flight school in Fresno, CA. There, he earned his Commercial, Multi-Engine, Instrument, CFI, CFII and MEI certificates and ratings, acquiring nearly 3,000 hours of flight instruction given, administering over 300 flight and ground examinations and developed a FAR Part 135 on-demand charter operation. After returning to Louisville, Hayden became a Licensed Sales Associate in 2007, and transitioned to a full-time career in real estate in mid-2008. He then affiliated with various national brands, ultimately earning his Broker’s License in 2013.
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Tom Biederman | Lexington, KY (Member) Appointed: May 2015, Term expires: October 2018 Commissioner Biederman began his career in real estate over 35 years ago when he obtained his sales associate license in 1980. In that same year, he also obtained his auctioneer’s license. In 1990, Beiderman became a broker and in 1994, he opened up his own real estate company in Lexington, Biederman Real Estate & Auctioneers, which he still owns and operates today. He also has two other real estate companies, Taylor Made Real Estate and Biederman Real Estate Referrals. His firms provide services from residential and commercial properties to large horse and agricultural farms.
Tom Waldrop | Mayfield, KY (Ex-Officio Member) Appointed: October 2015, Term expires: October 2019 Commissioner Waldrop began his real estate career in 1976 as a sales associate. In 1977, he joined his father’s firm and in 1978 he received his broker’s license. In 1980 he became a licensed Principal Auctioneer. He earned the coveted MAI appraisal designation from the Appraisal Institute in 1988 and is a Certified General Real Property appraiser in Kentucky and Tennessee. After serving terms as President of the Mayfield Graves County Board of REALTORS®, Waldrop serves as Board Treasurer of the West Kentucky Regional MLS, serving 100 firms and 600 agents. Currently, Waldrop is a partner at Trifecta Real Estate Services and focuses on commercial appraisals, sales, development, management and leasing.
Billy Beckham | Smiths Grove, KY (Consumer Member) Appointed: April 2017, Term expires: April 2020 Commissioner Beckham is the General Manager of Southern States Glasgow Cooperative, Inc., and has been in that role since 2006. He was named Manager of the Year three times for Southern States Cooperative, an award that is based on efficiency, return on capital, sales volume, and profitability. Prior to becoming the General Manager, he was the Agronomy Center Manager from 2002 - 2006. Beckham is a graduate of Western Kentucky University, where he earned a Bachelor of Science Degree in Agriculture with an emphasis in Business. He served on the Barren County Chamber of Commerce Board of Directors from 2006 to 2008. In 2009, Beckham was the recipient of the “Ernie Award”, in recognition of his commitment to personal and professional excellence. He also served on the Barren County Extension District Board from 2010 to 2013.
Shirley McVay Wiseman | Lexington, KY (Member) Appointed: June 2016, Term expires: June 2020 Commissioner Wiseman began her career in the 1960s as president of the McVay Group and then Wiseman Homes, both located in Lexington, Kentucky. From 1981-1985, Wiseman served as Acting Assistant Secretary for Housing and in other positions for the U.S. Department of Housing and Urban Development. In 1989, she was the first woman elected president of the National Association of Home Builders (NAHB). Besides NAHB, she held leadership positions with the Home Owners Warranty Corp. of Lexington, the Home Builders Association of Lexington, and the Kentucky Home Builders Association. Wiseman has served on the boards of the Alliance to Save Energy, National Association of REALTORS®, the Home Builders Institute, US Homes, and Barry University. She is also an entrepreneur and international consultant specializing in Russia, Poland and Czechoslovakia markets for manufacturing and housing developments.
FALL 2018 | Kentucky REALTORS® | 9
5 THINGS PROSPECTS CAN’T SAY NO TO BY JARED JAMES
People instinctively turn you down when you offer them your service. Work in these phrases when communicating with prospects to get them to “yes” faster. “I’m not a scripted person!” As a guy who runs a company that coaches thousands of agents, I can tell you that I’ve heard that line more than once … today. I used to say it about myself. Nobody wants to be the robotic telemarketer calling at 8:30 p.m. when you’re putting the kids to bed. That’s not what you become when you use scripts; you become a professional. Besides, you already follow scripts and dialogues in almost every other area of your life. When you bump into someone and say, “Hey, how’s it going?” or when conversation gets awkward and you start talking about the weather — those are scripts you have mentally adopted. It doesn’t matter whether you’re a “people person.” Without knowing how to use the proper phrases in your real estate business, you will never convert your leads and potential clients on the level that you should. There are five phrases you should incorporate into your client communications right away if you want to start converting at a higher rate and making more money. 10 | kyrealtors.com
‘Would you be offended if…?’
‘What would need to happen for…?’
When you first approach a prospect with an offer of service, they instinctively want to say no. So you need to change what they’re responding to. Don’t say, “Hey, can I come by tomorrow and look at your house?” The answer to that question is an easy “no.” Instead say, “I’m going to be in your neighborhood tomorrow around [insert time]. Would you be offended if I stopped by for a quick five-minute onsite price consultation?” Of course, there’s nothing offensive about that! So the prospect will say “no,” which, in this case, is a “yes” for you.
This question sets the expectation for whatever you want to happen. For example, start a listing presentation with, “What would need to happen for you to consider this meeting a 10 and leave no doubt that I’m the agent who should sell your house?” For a buyer consultation, you might say, “What would need to happen for you to believe that I’m the right agent to help you find the home of your dreams?” This phrase allows your prospects to lay out their criteria and create the expectation that if you meet such criteria, they are expected to hire you.
‘Do you have anyone sending you good deals right now?’
‘It’s funny that you’re contacting me about…’
When you ask a buyer if they have an agent, they are going to say yes 90 percent of the time — even if it’s not true — to get you to back off. But asking them if they have anyone sending them good deals right now has a completely different psychological effect. This makes the buyer wonder if you have access to properties that they don’t. They’ll give you a real answer: “Well, I had a friend sending me some stuff, but I haven’t signed anything with them. Why? Do you have access to deals I’m not seeing?” Now it’s game on.
People like to believe things are meant to be. So when a seller calls to inquire about the value of their home, you can increase the chance of conversion by saying, “It’s funny that you are contacting me about your neighborhood in particular. I was just telling two of my buyers that I was hoping something would come up over there because it’s perfect for them!” Now don’t say this if it’s not true; we don’t build trust by lying. But you get the point. Have something coincidental to mention whether you are working with a potential seller or buyer.
4 Strategies for Sticking to Your Business Plan BY JARED JAMES
‘I’m going to be at this number for the next 30 minutes.’ Please stop saying, “Give me a call back when you get a chance.” They will never get a chance — not because they’re rude but because life gets in the way. Instead, say something like, “Looks like I missed you but I wanted to let you know something really cool about that property. I’m going to be at this number for the next 30 minutes, so call me back as soon as you get this.” Give them a deadline, and they’ll be more motivated to call. People don’t like to miss deadlines. It also gives you an excuse to call them again later with another deadline if they don’t call back. Try it; it’s pure gold. Converting leads into clients is a science that involves skill over luck. Precision matters over the length of time that you do something. Jared James is a national speaker and trainer in the real estate industry who has tens of thousands of followers on Facebook, Snapchat, Instagram, Twitter, and Youtube. Jared was the keynote speaker at the 2018 KYR Convention & Expo in Louisville from September 25-27. Subscribe to get his free sales tips and videos at www.jaredjamestoday.com. To connect with Jared, go to www.connectwithjared.com.
Let’s be honest for a second: How many of you actually follow your business plan throughout the entire year? I’m willing to bet that almost none of you do, which is understandable because that’s just not how most of us operate. However, that doesn’t diminish the power of having a good business plan. You just need to make sure it works for the way you function. Here are four ways to ensure that your business plan works for you in the coming year so you can get the most out of 2018.
1. Check your ambition. Log into your MLS and search for homes sold in the past year. How many of those transactions were you a part of? The answer should motivate you to be more ambitious and raise your goals and expectations for the next year.
2. Know your numbers. A good business plan doesn’t just lay out what you need to do for the next year; it shows you what you need to do today. You should know exactly how many appointments you went on in 2017 how many of those appointments turned into transactions. This tells you, based on your closing ratios, how many appointments you need each day to reach your goals in 2018. Think of it like this: If your closing ratio on appointments is 50 percent, then you need to go on 100 appointments in the next year to do 50 transactions (figuring that you will work 50 out of 52 weeks). That breaks down to only two appointments a week—a goal you could easily achieve.
You’ve got to get clear on what constitutes a winning day for you. Being busy doesn’t mean you’re being productive. When you break it down and know the exact number of appointments you need to reach your goals, you’ll have the clarity to focus your efforts toward your desired outcome.
3. Make time blocking nonnegotiable. Create
alignment between what you say you want and what you do to get what you want every, or you will never succeed. For example, don’t say you want to run a marathon and then fail to train daily because you’re too busy. Likewise, you can’t say you want a successful real estate business and not make time for things such as follow-ups, vision planning, practicing your dialogues, and prospecting. If you don’t timeblock for key revenue-generating tasks and make that time nonnegotiable, you’ll end up spending most of your day putting out fires. You can check out my video on time blocking for more tips.
4. Hold yourself accountable. Most everyone
says they are willing to do the work, but they’re less inclined to keep track of their progress and realign if they veer off course. Accountability is where most of us fail because we always start with good intentions. But have you ever had a disconnect between what you intended to do and what you actually did? Of course you have. That’s why it’s important to either hire a coach or get an accountability partner from within your office to help you stay focused on your business plan and goals.
This year should be the year you not only plan but also take action. You need a business plan, but it has to be executed daily for it to matter. Are you ready to make this your year? Do me a favor and go to ConnectWithJared.com, and send me a message about what you’re doing differently this year to ensure that 2018 will be like no other year you’ve had. I look forward to hearing from you! FALL 2018 | Kentucky REALTORS® | 11
7 Reasons Your Real Estate Team Will Fail BY JARED JAMES
Use this checklist to determine whether you should rethink your team’s strategy. As consumers raise their expectations for more and better service from real estate professionals, the trend of creating real estate teams has gained steam. But the answer isn’t to cobble together a few willing participants in blind faith that several heads are better than one. Are you being thoughtful and purposeful about how you form your team? If you’re making any of these seven mistakes, you might need to rethink your team strategy.
❑ You’re not willing to let go. Being a team leader is a catch-22. On one hand, you know you can do more by delegating tasks and allowing others to specialize in specific roles. But on the other, team leaders tend to be type A personalities and have issues giving up control. I think the title of my book Get Out of YOUR Way! explains the conundrum perfectly. Just because someone doesn’t do something the way you would doesn’t mean they’re doing it wrong. If you want to grow, you have to be willing to allow others to screw up — even when your name is on the line. Without that risk, you will never experience the reward of having a fully functioning team.
❑ You misjudge your own
skill set. Too often, we believe we’re successful by being good at everything. Usually, the truth is that your strength in one particular area covers up your weaknesses in other areas. Selfdeception prevents you from identifying the gaps that need to be filled. I can tell you that my own business didn’t explode until I finally realized what I was terrible at — and started getting other people to fill those roles. Take some time to figure out what parts of the business you love doing and where you get the best results. Then you can tell your team where you need help, and they’ll be much more effective.
❑ You don’t have a long-term
plan to retain good talent. So many teams get excited about a great hire and then lose them a year later. When you’re developing compensation plans
for your salespeople and administrators, you have to make them attractive longterm. Would you stick around under the plan you are offering? If you’re afraid their success will lead to them leaving, then your plan isn’t a win for both sides now and in the future. Sure, you can succeed by being greedy and trying to make the most profit you can right now, but you’ll also find yourself looking for new team members every year or so.
❑ You hire people because
you like them. Just because you get along with someone doesn’t mean they’re right for the role you have open. Use the DISC profile to determine whether your hire has the right personality to be successful at the job. People are who they are, period. Don’t hire someone to be your administrator because you have a good feeling about them. Hire them because their DISC profile shows a high “C” with a little “I” mixed in. Hire an inside salesperson because they are a high “D” and can let rejection roll off their shoulder. You aren’t looking to hire five more people just like you. You want those who perform roles better than you could.
❑ You don’t have the systems in place to scale your business. The right processes are
necessary not only to recruit and retain good talent but also to create proprietary systems that can be followed by anyone new to the team so your business doesn’t take a step back when someone leaves. When leads come in, they should be automatically assigned according to whatever criteria you have set. There
should be automatic follow-up and a stepby-step process that is followed all the way through to closing, and the team leader should be able to review the process so that everyone is held accountable. This process is also important if you ever hope to create a salable asset out of your business.
❑ You don’t provide adequate
training. When the business becomes second nature to you, it’s easy to develop a “do what everyone else is doing” attitude. For rookies, though, it doesn’t work that way. Believe me when I say that what you think is common sense isn’t so common to many others. You have to be clear and continually train on exactly what you expect from your team. If your team adopts a Wild West culture where everyone just responds to calls and goes on appointments on a whim, it’ll be difficult to make them change course. Commit to training and mentorship programs for any new hires. You won’t regret it.
❑ You think training is only for
new hires. Many teams are looked at in awe for doing 200, 500, or 1,000 transactions a year. But those teams know they should be doing 300, 700, or 1,400 transactions. What’s stopping them? They don’t prioritize the ongoing training past the hiring stage that their team needs. Sometimes when you hit a growth spurt, you focus on just keeping up, and you start to forget the details that matter. Ongoing training and support provides those critical reminders. As a team leader, you can never allow quantity to trump quality — especially when your name is on the line.
12 | kyrealtors.com
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LEGISLATIVE UPDATE Thank you RPAC Investors!
2018 Hall of Fame
The strength of RPAC lies in the power of Kentucky REALTORS® membership. KYR is proud to have members in every corner of the Commonwealth that see the value of investing in RPAC to protect homeownership and real property rights. RPAC would like to recognize some special investors who have gone above and beyond to support the REALTOR® Party in 2018.
The Hall of Fame recognizes dedicated members who have made a significant commitment to RPAC over the years by investing an aggregate lifetime amount of $25,000 or more.
$50,000 Level
2018 President's Circle investors The President’s Circle is a group of REALTORS® who contribute directly to REALTOR®-friendly candidates at the federal level. The President’s Circle Program supports REALTOR® Champions, who are members of Congress that have made significant achievements in advancing the REALTOR® public policy agenda. The President’s Circle Program allows REALTORS® to contribute beyond RPAC dollars and increase the strength of the REALTOR® voice on Capitol Hill.
Al Blevins
David Earls
Tony Clark
Charles Hinckley
Steve Cline
Mike Inman
Charlie Murphy
Betty Schutte
John Weikel
$25,000 Level
Tony Clark
Jerry McMahan
William Snyder
Carl Tackett
Ann McDonald Guy Montgomery
Lois Ann Disponett
Ann McDonald
Harrell Tague
2018 Major investors (as 8.10.18) RPAC’s Major Investors are elite and passionate group of REALTORS® whose investments shape the political future of the real estate industry.
Golden R ($5,000 and above) Guy Montgomery Charlie Murphy
Paul Ogden
Mike Parker
Al Blevins Tony Clark David Earls Mike Inman
Ann McDonald Guy Montgomery Charlie Murphy John Weikel
Sterling R ($1,000 and above) Carl Tackett
John Weikel
30644
The number to text the word REALTOR to 30644 to sign up for the REALTOR® Party Mobile Alerts. By signing up, REALTORS® have a way to stay connected directly from their cell phone or tablet. Get information on finding your polling locations, election and primary voting day reminders and participate in Calls for Action. Kentucky’s goal is to hit 20% overall participation and currently has reached 94% of the goal. 14 | kyrealtors.com
Nancy Allison Mike Becker James Bramblett Bonnie Byerly Linda Gibson Cecil Angi Cline Steve Cline Cathy Corbett Anne Hart Cornett Barbara Curtis Sallie Davidson AnnElizabeth Delahanty Brad DeVries Lois Ann Disponett Merle Edmiston
Brenda Gayle Gooslin John Groft Deni Hamilton Jeff Shane Harrison Stephen Heartsill Daryl Hibbs David Hill Charles Hinckley Tanya Kaup Connie Lawson Brenda Loyal Amanda Marcum Elizabeth Monarch Joy Murphy Becky Murphy
Paul Ogden Mike Parker Rip Phillips Charlene Rabold Jim Sewell Mary Anne Simmons James Simpson Mike Spicer Steve Stevens Carl Tackett Kirk Tinsley Rusty Underwood Matt Weaver Danny Willis Janie Wilson
KYR’S LEGISLATIVE ACTIVITY ATAGLANCE
2018 Legislative session recap On Saturday, April 14th, state lawmakers closed out a busy legislative session that saw action on many big-ticket bills, including a two-year state budget, pension reform, and tax reform. Most new laws passed during the session went into effect this July, and many of those laws will have an impact on all Kentuckians. Kentucky REALTORS® was active during the legislative session, working to support REALTOR® Party issues and to protect homeownership and real property rights across the Commonwealth. Throughout the legislative session, the hard-working KYR Legislative Quick Response Team (QRT) read and analyzed hundreds of bills to determine their impact on our REALTOR® members, their clients, and the real estate industry. Thanks to the hard work from the QRT, leadership from the Governmental Affairs Committee, and great communication from our State Political Coordinators, Kentucky REALTORS® had a strong legislative session. REALTOR® voices were heard loud and clear by legislators who made the right decision to protect the real estate industry from a sales tax on services and to maintain the Mortgage Interest Deduction.
Total bills filed by legislators: 870 Bills actively tracked by KYR: 53 Bills MONITORED by KYR: 38 Bills OPPOSED by KYR: 5 OPPOSED bills that became law: 0 Bills SUPPORTED by KYR: 10 SUPPORTED bills that became law: 3
Notable bills that became law KYR SUPPORTED BILL: ASSISTANCE ANIMALS
House Bill 329 is a win for property managers across the commonwealth. This bill maintained protections afforded to people with disabilities who have a medically-determined need for an assistance animal, but it will also protect landlords from potential tenants who willfully seek to misrepresent the nature of their pet.
KYR SUPPORTED BILL: NAME ON REAL PROPERTY DEEDS
House Bill 266 clarified what constitutes a full name on a real property deed. This legislation will help our members alleviate any confusion on deeds at the time of closing and that should hopefully expedite the process.
FALL 2018 | Kentucky REALTORS® | 15
LEGISLATIVE UPDATE KYR SUPPORTED BILL: WORKERS COMPENSATION REFORM
House Bill 2 marks the first changes made to the Kentucky Worker’s Compensation system in over 20 years. Kentucky REALTORS® supported this bill because it aims to improve Kentucky’s business climate and its competitiveness with our neighboring states, and a stronger economy means a stronger real estate market.
TWOYEAR BUDGET
House Bill 200 will guide state spending for the next two fiscal years. The plan fully funds the state’s main public pension systems at the levels recommended by actuarial analysis. It calls for 6.25% baseline cuts for most state agencies, although some agencies are spared. Agencies that will avoid cuts include the Department of Veterans’ Affairs, Kentucky State Police, and local school-based Kentucky Family Resource and Youth Services Centers. The budget plan will boost base per-pupil funding for K-12 education to a record level of $4,000 per student in each fiscal year. It also includes more than $60 million in new revenue to help implement proposed adoption and foster care reforms and tens of millions of dollars to hire more social workers. REALTOR® Bottom Line: The budget is the road map for spending in the state for the next two years. It determines the funding levels for issues and programs that are important to REALTORS® and homeowners like public safety and education.
PUBLIC PENSION REFORM
Senate Bill 151 sought to make changes aimed at stabilizing public pension systems that face more than $40 billion in unfunded liabilities. Changes proposed by the pension reform legislation included placing future teachers in a hybrid “cash balance” plan rather than a traditional benefits plan and limiting the impact of accrued sick leave on retirement benefit calculations. In June, Franklin Circuit Judge Phillip Shepherd overturned the new pension law, citing procedural reasons. Governor Matt Bevin has said he plans to appeal the decision. REALTOR® Bottom Line: A poorly-funded pension system can negatively impact KY’s bond rating, which increases its borrowing costs and puts more burden on taxpayers. KYR supports changes to the pension system that provide financial stability and long-term growth to attract new investment in the state.
TAX REFORM
Tax reform provisions Included in House Bill 366 will purportedly generate about $400 million in additional revenue over the next two years. The plan includes a cigarette tax increase of 50 cents per pack and an expansion of the state sales tax to some services, such as landscaping, janitorial, laundry and small-animal veterinary services. Real estate transactions will not be subject to this new sales tax on services. The new law also created a flat 5% tax for personal and corporate income taxes in Kentucky. The inventory tax would also be phased out over a four-year period. Under the plan, the only itemized deductions allowed would be for Social Security income, mortgage income, and charitable giving. It would also disallow the deductions for such things as medical costs, taxes paid, interest expense on investments, and casualty and theft losses. And it would remove the $10 state personal income tax credit. REALTOR® Bottom Line: Tax reform measures directly impact the income of our REALTOR® members and their clients. KYR fought hard to protect its members from a sales tax on professional services and to maintain the Mortgage Interest Deduction. KYR believes good tax policy should encourage homeownership, not deter it. 16 | kyrealtors.com
To view all legislation considered during the 2018 Legislative Session go to www.lrc.ky.gov.
FEDERAL ISSUES UPDATE
Big win for REALTORS® on IRS guidance for 20% income deduction If you were tuned to the news on August 8th, you might have heard that the IRS released proposed regulations on the new 20% business income deduction for pass-through businesses. The deduction was part of the big tax reform package Congress passed at the end of last year and it was a huge win for REALTORS®. At that time, it was unclear who would be eligible for the deduction. Now that proposed regulations are out, it’s clear the new deduction will be available to a wide range of real estate professionals. Under the new law, individual owners of sole proprietorships, including independent contractors, and owners of S corporations, LLCs, or partnerships can take the 20% deduction on their net qualified (that is, ordinary, non-investment) business income. The calculation will depend on income thresholds, what type of business you own, and how you meet certain wage and qualified property tests. The basic structure is very favorable to small businesses and independent contractors. REALTORS® were integral to the favorable interpretation in the proposed rules. Your association made a forceful case—both in a detailed letter it sent on June 19th and in a face-to-face meeting with IRS officials in early August—that certain limitations on specified service businesses were not intended by Congress to apply to real estate professionals. And that’s the interpretation the IRS has ended up taking. As an August 7th Bloomberg News article says, the National Association of REALTORS® “met with OMB (Office of Management and Budget) and Treasury Department officials to discuss proposed rules outlining computation of the new write-off for pass-throughs.” The new deduction is available for tax years beginning after December 31st, 2017. You’ll be able to claim it for the first time on the 2018 federal income tax return you file next year. Look for detailed NAR guidance by mid-September. It’s a complicated provision and how it works for you will depend on many factors unique to your business structure and your income. As always, consult with your accountant or tax attorney on how this deduction should be applied in your situation.
NAR applauds senate passage of flood insurance extension NAR President Elizabeth Mendenhall released the following statement after the U.S. Senate voted on legislation extending flood insurance funding. The bill, which cleared the House the week prior, was signed into law by the President before the midnight deadline on July 31st. “We applaud lawmakers for taking this needed action to prevent disruptions to closings in thousands of communities across the country. Although the National Flood Insurance Program will be extended through November 30th when signed into law, the NFIP is in desperate need of reforms that will make it solvent
and sustainable in the long term. The National Association of Realtors will continue fighting for these reforms as the next NFIP reauthorization discussions loom later this year.” REALTORS® have been urging extension of the program for months. More than 129,000 REALTORS®, or roughly 15% of the membership of NAR, sent letters to their senators/members of Congress in support of the extension. Though this bill is a major win for REALTORS® and homeowners across Kentucky, success will be short lived as this extension of the NFIP is set to expire again on November 30th, 2018. Kentucky REALTORS® will continue to work alongside NAR to advocate for long-term reauthorization and positive reforms.
15.09% response rate to the NFIP Call for Action Nationally 24.68%
response rate to the NFIP Call for Action in Kentucky
VOTER
R E G I S T R AT I O N
Make your voice heard by heading out to the polls to support REALTOR® Champions. Please visit elect.ky.gov for voter registration, information about polling places, and sample ballots.
Important dates to remember: Kentucky State General Election: November 6 Voter Registration Deadline: October 9 Deadline to Request Absentee Ballot: October 30
options for access to health insurance coverage. It does not mean that a REALTOR® AHP will be available in the near term, but action continues to explore such options.
What is next?
DOL rule advances Association Health Plans What the Association Health Plan rule means for REALTORS®
The U.S Department of Labor (DOL) has finalized its longawaited Association Health Plan (AHP) rule to expand the definition of “employer” to include “working owners.” This change allows real estate professionals and other self-employed individuals to participate in association health plans. A key provision, advocated for inclusion in the rule by NAR, will allow the roughly 31 percent of REALTORS® who are offered coverage through a spouse to be eligible to choose an AHP option.
Bottom line
The ruling is a major step forward for NAR’s long-standing advocacy efforts to expand AHP eligibility to independent contractors. This ruling allows NAR to keep up its ongoing program to evaluate potential options for expanding REALTORS®
The road from the DOL ruling to the availability of an AHP is long and not without potential detours. Legal and other challenges could delay implementation of the rule. NAR has been advocating for an AHP solution for decades as a means to expand access to health insurance options for REALTORS® and this final rule makes AHPs one step closer to achieving that goal. The result of our advocacy efforts, the strategic recommendations of our Member Benefits team, and consultations with health insurance experts have positioned NAR to analyze a potential AHP option in a comprehensive process to help secure best quality health insurance at the most affordable price for all of our members and their families. NAR wants to caution our members that the development of an AHP will be a long process and may not meet the health insurance coverage needs of all members.
Where can I find more information?
NAR’s website www.NAR.realtor contains a number of resources on NAR advocacy efforts concerning health insurance availability, including policy statements, Congressional testimony and comment letters to regulatory agencies. Visit https://www.nar.realtor/ health-care-reform to explore the issue in depth.
Unlock the door to a new career In order to meet the needs of today's student, KRI is offering the 96-hour pre-licensing program entirely online. All the materials and resources needed to get started in real estate are included in the cost. Know someone who wants to get a real estate license? Receive a discount off upcoming classes by referring into the program! Want to know more - contact Nicole today at kri@kyrealtors.com.
kyrealtorinstitute.com/pre-licensing
FALL 2018 | Kentucky REALTORS® | 17
EDUCATION Online Courses www.kyrealtorinstitute.com > Courses > Online Education KRI offers a wide selection of online education, with both local and national instructors. You will find courses covering both law and elective CE, PLE Hours, Ethics and even the Core course. The newer courses are video-based, putting the instructor right in front of you – it’s just like being face to face. Courses are available to you 24/7 and can be taken at your pace – all you need is a computer and internet access. The deadline for receiving credit is December 31 so sign up now and complete before the end of the year!
Coming in 2019: 48 Hour Online PLE Packages
COE requirement reminder The Code of Ethics training requirements are now two-year cycles. A new two-year cycle began January 1, 2017 with a deadline of December 31, 2018. KRI offers many options to complete the requirement including the GRI 100 course and several online courses. Contact KRI for more information on the options available to you.
Get started in real estate www.kyrealtorinstitute.com > Pre-licensing In order to meet the needs of today’s student, KRI is offering the entire 96-hour pre-licensing program entirely online. All the materials and resources needed to get started in real estate are included in the $599 price.
Course Calendar www.kyrealtorinstitute.com > calendar
Course Registration: www.kyrealtors.com/classes
KRI scholarship recipients www.kyrealtorinstitute.com > Scholarships The KRI Trustees award scholarships on an annual basis as a way to meet KRI's mission – to enhance real estate professionalism and knowledge by providing quality educational services and programs for the real estate industry and the public. KRI makes scholarships available to members who want to obtain the GRI designation, as well as provide scholarships to Kentucky residents who wish to pursue a career in real estate. Scholarship winners for 2018 were:
Pre-Licensing Winners Photo Not Available
Janet Mitchell
Mary Rash
Meaghan Thompson
Jessica Walker
Know someone who wants to get a real estate license? You can get a referral discount off upcoming classes! Want to know more - contact Nicole today at kri@kyrealtors.com.
GRI covers all PLE requirements www.kyrealtorinstitute.com > GRI www.kyrealtorinstitute.com > Post-License Post-licensing Education (PLE) law went into effect on January 1, 2016, which requires all new licensees to take 48 hours of approved PLE courses within two years of license activation. KRI has you covered, as all 6 GRI courses (GRI 100-600) satisfy the 48 hours of PLE requirements. For more information on PLE requirements, please visit www.kyrealtorinstitute.com > Post-Licensing The GRI program has been redesigned to meet the needs of today’s real estate professional including one day courses and a full year’s worth of CE per course. The courses also count for broker credit and PLE credit. With GRI, you can build your business and expand your knowledge through courses that offer specific training in key areas of real estate. And, you will increase your network of real estate professionals that can assist in generating leads and referrals from across the state. Get started now on the most popular national designation in real estate. Already have your GRI designation, but there’s a GRI course being taught near you? No worries! GRI grads can take the course again at a discount rate and still get CE credit. 18 | kyrealtors.com
GRI Winners
Machaela Ballard
Sue Ann Collins
Alissa Doan
Diane Wagers
CE/CORE & GRI Courses Still Available This Fall: GRI 400: Finance (Louisville)
8/15/2018
8:00 am–5:00 pm EST
Jeff Ratanapool
GRI 200: Risk Reduction (Florence)
8/15/2018
8:00 am–5:00 pm EST
Jennifer Fields
GRI 200: Risk Reduction (Louisville)
8/21/2018
8:00 am–5:00 pm EST
Jennifer Fields
GRI 100: Ethics & Law (Madisonville)
8/22/2018
8:00 am–5:00 pm CST
Jason Vaughn
GRI 400: Finance (Bowling Green)
8/23/2018
8:00 am–5:00 pm CST
Jeff Ratanapool
The Code of Ethics – Our Promise of Professionalism © (Prestonsburg, KY)
8/28/2018
9:00 am–12:00 pm EST
Doug Myers
“You Before Me” – Demystifying Fiduciary Duties © (Prestonsburg, KY)
8/28/2018
1:00 pm-4:00 pm EST
Doug Myers
Understanding RESPA - Avoiding the Government Paid Condo © (Prestonsburg, KY)
8/29/2018
9:00 am–12:00 pm EST
Doug Myers
Avoiding FSBO Fizzle - Working the “For Sell by Owner” © (Prestonsburg, KY)
8/29/2018
1:00 pm-4:00 pm EST
Doug Myers
GRI 400: Finance (Somerset-Lake Cumberland)
8/29/2018
8:00 am–5:00 pm EST
Jeff Ratanapool
Core Course (Owensboro)
8/30/2018
8:00 am–5:00 pm CST
Doug Myers
GRI 500: Contracts (Louisville)
9/5/2018
8:00 am–5:00 pm EST
Harry Borders
GRI 100: Ethics & Law (Florence)
9/5/2018
8:00 am–5:00 pm EST
Jason Vaughn
GRI 400: Finance (Florence)
9/12/2018
8:00 am–5:00 pm EST
Jeff Ratanapool
Core Course (Henderson)
9/12/2018
9:00 am–4:00 pm CST
Art Reed
GRI 300: Competitive Market Analysis (Bowling Green)
9/20/2018
8:00 am–5:00 pm CST
Larry Disney
GRI 200: Risk Reduction (Lexington)
10/1/2018
8:00 am–5:00 pm EST
Jennifer Fields
GRI 300: Competitive Market Analysis (Lexington)
10/4/2018
8:00 am–5:00 pm EST
Larry Disney
Core Course (Prestonsburg, KY)
10/9/2018
9:00 am–4:00 pm EST
Art Reed
GRI100: Ethics & Law (Louisville)
10/9/2018
8:00 am–5:00 pm EST
Jason Vaughn
Making the Money Connection (Prestonsburg, KY)
10/10/2018
9:00 am–4:00 pm EST
Art Reed
ANSI Residential Measuring Standard (Murray)
10/18/2018
9:00 am–12:00 pm CST
Doug Myers
The Code of Ethics – Our Promise of Professionalism © (Murray)
10/18/2018
1:00 pm–4:00 pm CST
Doug Myers
GRI 500: Contracts (Lexington)
10/18/2018
8:00 am–5:00 pm EST
Jennifer Fields
GRI 300: Competitive Market Analysis (Owensboro)
10/25/2018
8:00 am–5:00 pm CST
Larry Disney
GRI 100: Ethics & Law (Bowling Green)
10/25/2018
8:00 am–5:00 pm CST
Jason Vaughn
GRI 100: Ethics & Law (Lexington)
11/1/2018
8:00 am–5:00 pm EST
Jason Vaughn
GRI 200: Risk Reduction (Hopkinsville)
11/8/2018
8:00 am–5:00 pm CST
Jennifer Fields
GRI 600: Business Systems & Technology (Somerset-Lake Cumberland)
12/18/2018
8:00 am–5:00 pm EST
Heidi Fore
GRI 600: Business Systems & Technology (Louisville)
12/19/2018
8:00 am–5:00 pm EST
Heidi Fore
GRI 600: Business Systems & Technology (Bowling Green)
12/27/2018
8:00 am–5:00 pm CST
Heidi Fore
GRI 600: Business Systems & Technology (Florence)
12/28/2018
8:00 am–5:00 pm EST
Heidi Fore
Professional Standards Scholarship winners www.kyrealtors.com > professional-standards-scholarships
From left to right: Greg Crase, Kristen English and Debbie Steiner were gearing up to get the day started in Chicago for the PS Training.
KRI is pleased to announce the 2018 recipients of the Professional Standards Training Scholarships. Kristen English, a member of the Greater Louisville Association, Greg Crase and Debbie Steiner, members of the Northern Kentucky Association, were selected to attend the NAR Professional Standards Seminar in Chicago, IL. As part of the scholarship, each winner receives up to $1,500 to cover meeting expenses. NAR has conducted this seminar at least once a year for decades and the program has been overwhelmingly well received by all who attend. FALL 2018 | Kentucky REALTORS® | 19
The Seller’s Affidavit
O
ne of the documents that a seller is often requested to sign at a closing is the Seller’s Affidavit. However, very few sellers actually realize what they are signing. The Seller’s Affidavit is a legal document that states the status of potential legal issues involving the property or the seller. It primarily operates as a sworn statement of fact that the seller of a property holds clear title to it. For example, it will often state the following: 1. That the Seller has full, complete and undisputed possession of the Property and that there are no leases, options, interests or demands held thereon, and 2. That no individual, entity or Governmental Authority has any claim against the Property under any applicable laws and that no individual, entity or Governmental Authority is either in possession of the Property or has a possessory interest or claim in the Property, other than Affiant, and 3. That the Property is free and clear of all liens, taxes, special assessments, municipal or county liens, encumbrances and claims of every kind, nature and description whatsoever, except for real estate taxes for the current year, which are not yet due and payable. The question becomes, why does the buyer need the seller to swear to this if the seller is giving a general warranty deed? A general warranty deed guarantees to the buyer that the seller holds clear title to a piece of real estate and that the seller has the right to sell it to the buyer. They key difference is that the deed provides a contractual guarantee while the Seller’s Affidavit provides a written representation to the buyer, on which the buyer may then rely. Thus, if the representation is untrue, the buyer may sue the seller for fraud. This opens the seller up to the possibility that the buyer may recover consequential and punitive damages. Moreover, generally speaking, the seller may not bankrupt a debt that arises from the seller’s fraudulent activity. However, it is very rare to have a buyer, of their own volition, ask sellers to sign a Seller’s Affidavit. More often than not, it is 20 | kyrealtors.com
the closing agent that requires it. This is primarily done in order to protect the closing agent from problems in the chain of title that were not revealed in the closing agent’s title abstract. These problems could be the result of the title abstractor’s error or because a title exam would not reveal the potential problem. For example, if the seller had recently filed bankruptcy, which limits the seller’s ability to convey property, a title examination would not reveal that fact. Requiring the seller to sign a Seller’s Affidavit ensures that if a problem arises the closing agent may also pursue the seller for the representations that are made in the Seller’s Affidavit. Otherwise, only the buyer could pursue a claim against the seller. Because the Seller’s Affidavit is usually created by the closing agent, there will often be terms contained in it that do not directly involve the status of title. For example, it may have a term that requires the seller to come back and sign any necessary documents post-closing, should they be deemed necessary. The Seller’s Affidavit may also address issues such as post closing apportionment of taxes. It may even include language that requires a seller to pay the closing agent’s attorney fees should they have to pursue the seller for any reason. More recently, the Seller’s Affidavits have included language that states that the terms of the purchase contract shall survive the closing. Without language like this, all terms related to the purchase would merge into the deed and cease to exist. This is what the seller would most likely prefer. The seller would like to leave the closing and not worry about any issues with the property that may have been previously covered by the contract. Including the language is a benefit to the buyer and closing agent that would not exist but for the Seller’s Affidavit. Therefore, anyone representing a seller may want to remind the seller to read the Seller’s Affidavit very carefully before the he/she agrees to sign it. Jason Vaughn is a lawyer with Vaughn & Smith, PLLC in Louisville and serves as legal counsel to KYR. The attorneys at Vaughn & Smith, PLLC constantly monitor the real estate industry as a whole, as well as any and all changes in the law that may affect it. They have intimate knowledge of commercial and residential real estate transactions and can utilize this base knowledge when representing their client's interests. This discussion should not be viewed as legal advice. Please consult your attorney.
REALTOR® SAFETY
IS A YEARROUND CONCERN
W
e tend to think horrible events only happen to other people, in other places. A few years ago, in Arizona, a Gilbert REALTOR® was attacked by a man at an open house. Last June, former REALTOR® Sidney Cranston, Jr. met a potential buyer and then disappeared. In 1990, a 26-yearold male REALTOR® met a new client at a vacant office in Tucson and was killed. And most recently, the high-profile murder of Beverly Carter in Arkansas made headlines across the country. Horrible things can and have happened within real estate. Our industry has accepted high risk as a norm. This doesn’t have to be the case there are many things that you can do to stay safe. Here are a few tips from Paula Monthofer:
Professional = Profitable There is a lot of talk about “Raising the Bar.” If we want the bar raised, we must raise it ourselves. To be treated as professionals we must act like professionals. On top of saving yourself from a potential attack, meeting prospective clients in your office will enable you to serve them better, help them faster and get you more clients.
Alert = Alive Between cell phones, radios and the noise in our heads, it can be easy for us to be unaware of our surroundings. Instead, actively assess your environment. Phone down, eyes up. What do you see, hear and sense? Understand what a threat looks and sounds like…a stranger asking, “Can you show me this vacant house?” is a threat. Honor your instincts. You have permission to walk away from ANY thing at ANY time which does not feel right to you — without explanation or apology.
Systematized = Safe What is your Standard of Practice? Standards such as these can help keep you safe and organized:
Intake form – Allows you to focus on the person in front of you (and see if they seem shady)
Hours of operation – Decide what time you are done showing homes and let your clients know
Phone charged – This is your lifeline, keep it charged and have a backup battery
Drive separately – A car is a very confined private space, one which should not be entered with a stranger
Man or Woman: You’re Equally At-Risk Crimes against REALTORS® involve both men and women. Police investigated foul play in the disappearance of Sidney Cranston, Jr. At 5-foot-9 and 162 pounds, this 40 yearold man (as well as the 26 year-old male victim in Tucson) may have seemed like unlikely prey, but meeting strangers in private spaces offers opportunities for criminals.
Basic Safety Tips for REALTORS® Never meet a stranger alone in a private space…make your first meeting at your office or other public space Take the time to perform a gut check and then…honor your instincts If you hold an open house, never do it alone…deter criminals with a sign that reads: These premises are being recorded and live-streamed for safety & training purposes.
SAFETY TIPS
TO SHARE WITH SELLERS September is REALTOR® Safety Month and NAR has worked hard to keep REALTOR® Safety foremost in members’ minds. But what about your clients? They, too, face some dangers in allowing strangers into their homes or visiting other people’s properties. Share this valuable advice with your sphere, and you’ll help them learn to protect themselves against crime: ■ Remind your clients that strangers will be walking through their home during showings or open houses. Tell them to hide any valuables in a safe place. ■ Don’t leave personal information like mail or bills out in the open where anyone can see it. Be sure to lock down your computer. ■ Tell your clients not to show their home by themselves. Alert them that not all agents, buyers and sellers are who they say they are. ■ Instruct your clients that they are responsible for their pets. If possible, animals should be removed during showings. ■ At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. ■ When you leave a client’s property, whether after an open house or a standard showing, make sure that all doors and windows are locked.
Paula Monthofer, GRI, e-PRO®, is a graduate of Rutgers University and served as the 2017 president for the Arizona REALTORS®. She will also serve as Region 11 Vice President for NAR in 2019. Paula was a featured speaker at the 2018 KYR Convention & Expo in Louisville from September 25-27. FALL 2018 | Kentucky REALTORS® | 21
LOCAL ASSOCIATION NEWS Local boards/associations are encouraged to submit information for this section. Pictures must be at least 300dpi. Send all association news to hcooper@kyrealtors.com.
Greater Louisville Association members help commemorate Fair Housing Month GLAR wanted to get members involved in celebrating the 50th Anniversary of the Fair Housing Act and raise awareness about the milestone. During a member event, numerous photos were taken for a video montage with the theme “What We Think About Fair Housing.” Check out the one-minute video featuring GLAR members making their voices heard about fair housing and why it is so important to our industry and the community at https://youtu.be/ IGY5SH2cqvc.
Lexington named “best place to live” US News and World Report analyzed the 125 most populous metro areas to find the best places to live. To make the top of the list, a place had to have good value, be a desirable place to live, have a strong job market and a high quality of life. Lexington was ranked number 21 on the list overall and number 2 in small cities. Louisville came in at number 61 overall and number 20 under the large city category.
Wilmore selected as ‘nicest place in Kentucky’ by Reader’s Digest According to a recent article in Readers’ Digest titled the “Nicest Places in Every State,” Wilmore was chosen as the nicest place in Kentucky. The city and Asbury University are working to fight the local opioid crisis and led to its recognition. The publication praised Asbury University’s new Joe Pitts Center for Public Policy and its inaugural conference “The Opioid Crisis: Seeking Solutions” for
addressing the issue, as well as Dr. John McDaniel, owner of Sims Drug & Gifts, for donating close to $70,000 of the overdose-reversing drug Naloxone to Jessamine County Emergency Management. The publication could have also talked about several other amazing things Wilmore has to offer such as the city’s historic downtown, hundreds of acres of horse farms (including Asbury’s 350-acre equine center), community events like the annual Old-Fashioned Christmas, Highbridge Film Festival and hundreds of other events at both the university and Asbury Theological Seminary.
Louisville lands the millennial generation The hotbed for millennials in Kentucky is Louisville. At least, according to the U.S. Census Bureau and SmartAsset. Louisville ranked as one of the top 15 cities in the country attracting the largest generation. To derive this ranking, SmartAsset compared the number of people between the ages of 20 and 34 who moved to 217 U.S. cities to the number who moved away from those same cities. The data shows the number of millennials who moved to Louisville at 12,657, versus the number that moved out at 8,765. Louisville was also recently named one of the best cities for new college grads by SmartAsset. Coming in at number eight on the list, it was recognized for its affordability and average salaries for college graduates.
Lexington one of America’s safest cities A new report by SafeWise is listing that Lexington may be one of the safest cities in the nation. On the list of the 10 Safest Metro Cities in America, Lexington ranked third behind only Virginia Beach, Virginia, which ranked as the safest city, and Honolulu, Hawaii which came in at number two on the list. The report looked at the number of reported violent crimes per 1,000 people in each city it examined and reviewed 2016 FBI crime statistics and population data to formulate the report.
FINANCIAL SECURITY
Rate of Savings vs. Rate of Return: Which is best for you? Fact or Fiction: In order to achieve a high reward on your money, you have to accept high levels of risk. FICTION. The truth is, achieving a high overall reward on your money is possible while taking minimal risks. For years, common investing wisdom has promoted the idea that high risks lead to high returns, but in reality, many people experienced low rewards for taking high risk. Taking too much risk with your money can be a recipe for financial disaster. It is often assumed that high risk investments
22 | kyrealtors.com
will automatically generate high returns, leading you to believe that you will have much more money in your future as a result. When you plan on having a large return you might end up actually saving a much lower percentage of your income than you should be. High risk investing is called high risk for a reason. The risk taking could result in earning far less than you expected, or even worse, you could actually lose large amounts of money. By the time you realize the returns did not pan out as expected, you may have lost decades worth of time and find yourself on the doorsteps of retirement with a fraction of what you expected to have in savings.
FINANCIAL SECURITY (Cont.) High risk doesn’t always equal high reward It is common to hear a misconception that traditional financial planning offers; in order to achieve a specific financial goal, high risk products are the way to go. Many people build their financial futures based upon the hope that they’ll be in the right place at the right time with their retirement nest egg. There are many factors that affect your future such as rising taxes, life events and perhaps a stock market that stays flat. All of these things cannot be monetized or computed with a mathematical equation to get an exact number as to how much you should have in retirement. Financial planning need and goal calculations suggest you don’t have to save as much, as long as you’re investing your money. However, a high return is not guaranteed, even if the stock market is performing well. It’s not just taking the high risk with your money but it’s also how much that risk is actually costing you. For example, let’s say you invest your money in a moderately aggressive stock fund averaging a 7.5% growth. You should keep in mind that you have to pay taxes on that growth, so right away you’re actually accumulating 5% growth instead of the 7.5%. Over time, this return can still leave you with a significant amount of money for retirement. BUT, you can’t save all of that money. There are other cost factors that should be considered to find out what your real profit is. Factors such as taxes, fees, debt (mortgages, cars, student loans) and lifestyle expenses all have to be considered when determining your actual return. Decisions with your money need to be much more certain in nature and the only thing you can control is how much you save.
There is no way to predict what may happen tomorrow and you could suddenly be faced with events such as an unexpected job loss, a medical emergency, providing parent care or an opportunity to start a business. All of these events require available funds that can readily and easily be accessed without hassles or penalties. Before taking high risks with your hard earned money, or setting aside funds in illiquid accounts, focus on the following: • Become a world class saver by setting aside 15-20% of your gross income. • Accumulate one year of annual household income in accounts you can easily access if necessary. • Protect your balance sheet and cash flows against life events that could wipe out your ability to save and wipe out the money you’ve already saved. • Become more efficient by lowering taxes and other expenses that can erode your savings and investment returns. Rather than hoping for an attractive high rate of return on your money, and accepting the high risks that come with it, focus on these steps to lead you toward a more positive road to building wealth. Always remember, your rate of savings is more important than your rate of return. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. The Living Balance Sheet® and the Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. © Copyright 2005-2016, The Guardian Life Insurance Company of America.
So what can you do to get ahead and stay ahead? Focus more on your rate of savings than on your rate of return. The better you are at putting money away, the less dependent you may be on needing high returns and taking on high levels of risk. If you feel like you are fighting an uphill battle as you build your net worth, and you feel like you aren’t making any progress, ask yourself these questions… • How much money did I save and/or invest last year as a percentage of my total income? • What is the right amount of money to save and invest each year? If you find yourself saving around 5% of your income, there may be a temptation to turn to higher risk investments to help close the gap between where you are headed and where you should be for retirement. By setting a goal to save at least 15-20% of your gross annual income, you can be in more control over your financial future. Since rates of return are so unpredictable, saving the right amount each year may actually allow you to lower the amount of risk you take. You work hard for your money and it shouldn’t all be put at risk in hopes of a high payout.
Become a saver before becoming an investor. Today, it is all too common for people to invest in market-based investments before using promise based guaranteed assets. This approach may not only encourage high levels of risk and volatility, but might also leave you without enough liquid and accessible money to respond to changing life events.
Lifetime Financial Growth is the newest affinity partner of Kentucky REALTORS® and presents the Wealth Steps program which measures your financial wellness by combining interactive workshops on meaningful financial concepts with a discrete, personalized website experience where members can analyze their individual financial situations and explore best practices. Through this free program, members will gain knowledge of how to maximize their lifetime earning potential through protection, saving, and planning. It will offer complimentary one-on-one consultation with a Wealth Steps specialist for you upon request. Get started today and then check out the free online workshops to help you handle your finances and manage your wealth. Learn more at www.kyrealtors.com/wealthsteps. Wednesday, October 4 at 10am EST: Life Events Workshop Learn how to maintain a balance between liquid assets and other long-term financial strategies. Wednesday, November 7 at 10am EST: Living Debt Free Workshop Discover the real impact that short-term debt can have on wealth building potential and how to eliminate it completely.
FALL 2018 | Kentucky REALTORS® | 23
BY THE NUMBERS Thirty-six percent of adults under 35 owned a home at the end of 2017, up from 34.1% in early 2016, according to research firm Veritas Urbis and the Census Bureau. More than a third of all home purchases were made by Millennials in the 12 months ending in July 2017, making the group the most active generation of buyers, according to an NAR survey.
The percent of REALTORS® that say homebuyers are interested in sustainability, according to NAR REALTORS® and Sustainability 2018 Report. Approximately three-quarters (71 percent) of REALTORS® believe energy-efficient features are a highlight when marketing listings, cited as either “somewhat” or “very valuable,” and 40 percent of REALTORS® report their MLS has “green” data fields to showcase them. Eighty percent of REALTORS® report their market has solar panels, and 23 percent report their market has tiny homes, or homes less than 600 square feet. The first year in which smartphone unit shipments didn’t grow at all. As more of the world become smartphone owners, growth has been harder and harder to come by. The same goes for internet user growth, which rose 7 percent in 2017, down from 12 percent the year before. With more than half the world online, there are fewer people left to connect.
The percent of people between the ages of 22 and 35 that cite student loans as the reason they haven’t yet purchased a home, according to NAR, and almost a fifth or borrowers owe more than $100,000.
If you want to sell a home for the most money, an average of $2,023 more, list it on this day (not Sunday, which was found to be the worst day). If you want to sell it in the fastest amount of time, list on a Thursday (5 times faster than if listed on Sunday), according to a recent Redfin study, which analyzed a sample of 100,000 homes that sold in 2017. 24 | kyrealtors.com
Ages 53 to 71
13 years
61% 36 under 35
2017 40 vs 46 vs 48
More than 80%
5.9 hours Wednesday $100,000
According to the same study, virtual tours were most important to buyers between the age of 53 and 71. Only 43 percent of millennials ranked virtual tours as “very useful” in their home search, making them the least interested of all generations. And older buyers are increasingly relying on mobile; more buyers age 63 to 71 found their agent through a mobile app than any other group. Only 42 percent of millennials ranked technology as a very important skill for an agent to possess, lower than all other age groups.
The homeownership rate rose in 2017 for the first time in 13 years. The 1st quarter of 2018 marked the fifth consecutive quarter where the homeownership rate rose from the prior year, according to U.S. Census data. It held steady at 64.2%, unchanged from the prior quarter and its highest level since 2014. The share of Americans who own a home rose from the prior year, from 63.6% in the first quarter of 2017.
While 40 percent of buyers aged 37 years and younger listed their first step in the home buying process as “looked online for properties for sale,” that same metric was 46 percent for ages 38 to 52 and 48 percent for ages 53 to 71. Fifteen percent of millennial buyers said their first move was to call a real estate agent, according to the NAR 2018 Home Buyer and Seller Generational Trends Report.
People increasing the amount of time they spend online with U.S. adults spending 5.9 hours per day on digital media in 2017, up from 5.6 hours the year before. Some 3.3 of those hours were spent on mobile, which is responsible for overall growth in digital media consumption.
The average amount spent on rent by the time a millennial turn 30.
HOUSING STATS
Home sales experiencing a decline in Kentucky Prices and inventory on the rise throughout the state June home sales were at the lowest level for the month since 2014, with the number of transactions decreasing 5.4 percent compared to a year ago (5,504 in 2017 versus 5,207 in 2018). Even with the decline, total home sales for the first half of 2018 are still on track to be the second highest ever for Kentucky. Through June, home sales reached 25,253, only 2.7 percent (or 697 total homes) below the same period in 2017 when 25,950 homes sales were recorded. Across the country, sales were down slightly for the month, with the National Association of REALTORS® (NAR) reporting a decrease of 2.2 percent when compared to June 2017. Lawrence Yun, NAR chief economist, said closings, on the national front, fell on an annual basis for the fourth straight month as there continues to be a mismatch between the growing homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining. He continued by saying the root cause is without a doubt the severe housing shortage with available properties going under contract very fast. This dynamic is, in turn, keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales. The state’s housing inventory rose year-over-year for the first time in 2018, with 3.47 months of supply in June, slightly higher than it was in May 2018 and in June 2017. For the year, however, inventory is down 2.6 percent versus the same period in 2017. Nationally, housing inventory is 0.5 percent above a year ago, which is the first year-over-year increase since June 2015. Inventory levels across the U.S. stand at a 4.3 month supply. “Properties are not staying around on the market very long,” said Steve Cline, the 2018 president of Kentucky REALTORS®. “Even though the inventory shortage didn’t show a statistical decline in Kentucky, homebuyer demand continues to strengthen in many markets and there just aren’t enough homes currently available to satisfy the demand, especially in the more affordable price ranges.”
This is evident when looking at the days on market (DOM), which shows how many days a home has been actively listed for sale. In Kentucky, days on market has dropped to just under 115 days for the first six months of the year, down 6.5 percent over 2017 when it was at 123 days. In June, DOM dropped to 107 days, from 115 in June 2017, a decrease of 7 percent. On the national level, the amount of time a property stayed on the market is surprisingly low, with NAR reporting 26 days in June, down from 28 days a year ago. Fifty-eight percent on homes sold in June across the country were on the market less than a month. “The current level of homes available in Kentucky is far from what’s needed to satisfy demand levels,” added Cline. “And given the fact that the growing economy is bringing more potential buyers into the market and new home construction is still below where it needs to be, this demand is driving up prices in many parts of the state.” The state’s median home price jumped to $144,271 in June, an 8 percent increase over June 2017 and 7.8 percent over the previous month. June marked only the second month (July 2017) where the median price exceeded the $140K threshold. For the year, the median home price increased to $131,433, up 6.4 percent from the first six months in 2017 when prices were $123,497. Nationally, the median home price in June reached $276,900, an all-time high, and up 5.2 percent from the same time last year when prices were $263,300. June marked the 76th straight month of year-over-year gains. “Even with the upward momentum of prices for homes in Kentucky, they are still affordable when compared to the national picture,” said Cline. “In addition, reports are showing that a national trend of increasing supply may be playing out and if this proves to be true, prospective buyers will begin to see more choices and a softer price growth as we move forward.” Kentucky REALTORS® is one of the largest and most influential associations in Kentucky. Founded in 1922, Kentucky REALTORS® represents more than 11,000 REALTORS® who are involved in all aspects of real estate, including residential and commercial real estate brokers, sales agents, developers, builders, property managers, office managers, appraisers and auctioneers. To view housing statistics for the state, visit housingstats. kyrealtors.com.
JUNE 2017 vs JUNE 2018 Board/Association
# Sold 2017
# Sold 2018
Sold %
Median Price 2017
Median Price 2018
Median Price %
Ashland Area Board Central Kentucky Association Eastern Kentucky Association Greater Louisville Association Greater Owensboro Association Heart of Kentucky Association Henderson-Audubon Board Hopkinsville-Christian Board Kentucky-Barkley Lakes Board Lexington Bluegrass Association Madison County Board Madisonville-Hopkins Board Mayfield-Graves Board Murray Calloway County Board Northern Kentucky Association Old Kentucky Home Board Paducah Board Pennyrile Board REALTOR® Association of SKY Somerset-Lake Cumberland Board South Central Kentucky Association
84 72 64 1787 157 247 22 65 53 1428 74 40 32 49 710 73 66 28 300 106 47
105 74 64 1665 161 225 35 42 49 1380 14 60 29 45 692 59 93 23 248 108 36
25% 3% 0% -7% 3% -9% 59% -35% -8% -3% -81% 50% -9% -8% -3% -19% 41% -18% -17% 2% -23%
95250 124250 97500 184000 137500 164000 139700 126500 88000 165000 141500 100000 85700 132501 167300 175000 145500 137950 160500 103500 135000
110000 147550 97500 194500 144000 174900 177000 108400 127000 176000 149950 95250 85000 128500 175000 150400 155000 190000 168500 138000 137250
15% 19% 0% 6% 5% 7% 27% -14% 44% 7% 6% -5% -1% -3% 5% -14% 7% 38% 5% 33% 2%
Totals
5504
5207
-5%
133,626
140629
5%
FALL 2018 | Kentucky REALTORS® | 25
Create cozy sitting areas
5 Staging Tips
FOR THE OUTDOOR LIVING ROOM
I
BY KRIS KISER, PRESIDENT & CEO OF THE OUTDOOR POWER EQUIPMENT INSTITUTE (OPEI)
t isn’t always obvious to buyers how the spaces in a home are intended to be utilized. Solid staging can help, but there’s good reason to take the extra steps to stage the outdoor “living room” at your listings, as well.
Outdoor spaces are quickly becoming one of the most coveted home features, especially in the Bluegrass State where the outdoors can be enjoyed nearly yearround. The outdoor area expands living space without expensive renovations, offers a relaxing respite from everyday stress, provides a safe place for kids and pets to play, and creates an oasis for entertaining guests. Here are the top 5 ways to stage the outdoor living room, courtesy of the Outdoor Power Equipment Institute (OPEI).
Declutter & clean Just as with indoor staging, the first step to sprucing up the outdoor living room is to clear dirt and clutter from the space. Store lawn equipment, children’s toys, and pet play things in a shed or garage. Have clients stash lawn ornaments and yard art, especially anything that is personalized. (After all, the goal is to get buyers to envision themselves in the space.) Thin out furniture and patio accessories to make the space look larger. Finally, give the entire area a good scrub down, sweeping away dust and debris to create a fresh, clean canvas.
Invite the outdoors in Blending interior and outdoor living spaces helps the exterior area feel like an extension of the home, not an afterthought. Ensure blinds and curtains are open to the family yard, highlighting the outdoor oasis before the potential buyer even steps through the backdoor. If the weather is nice during a showing, leave sliding patio or French doors open to illustrate just the space’s seamlessness. Finally, ensure the indoor and outdoor décor complement one another by working with your client to utilize similar colors, materials and styles both inside and out. 26 | kyrealtors.com
Help your clients arrange their outdoor furniture in a way that invites buyers to sit down and envision themselves enjoying the seller’s backyard. Leave a cold pitcher of iced tea or fresh-squeezed lemonade on the outdoor dining table for this very purpose. Create easy traffic flow throughout the outdoor living room, while offering a number of places for people to sit – at a table, around a fire pit, or in a cozy chair configuration. Also, offer some shade by using umbrellas or outdoor curtains to minimize sun glare and maximize visions of enjoyment in the outdoor living room.
Soften the outdoor space Introducing a few soft design features into the outdoor area to create an inviting atmosphere. Rugs, throw pillows and upholstered patio furniture are a few ways to accomplish a “cozy” feel. Ensure these items are looking fresh and clean and not worn and dated. It’s relatively inexpensive to swap out new pillows and rugs. Create outdoor ambiance by hanging string lighting, introducing a fire pit in the center of a patio, setting up a Zen-like water feature, or adding candles, small plants and freshly-cut flowers to tabletops.
Utilize living landscapes Nothing says “welcome home” quite like a beautiful living landscape, complete with flowering shrubs, trees, flowers, and other vegetation. Encourage clients to freshen up their family yard by weeding, mulching and planting flower beds and pots with colorful flowers and verdant plants. Vases of flowers can also help bring life – and a pop of color – to outdoor tablescapes. To learn more about the benefits of the living landscapes in your clients’ outdoor living room, go to www.SaveLivingLandscapes.com.
Powerful video strategy to easily earn up to 2682% ROI
O
BY MARKI LEMONS-RYAHL
n April 16th 2016, the warmest day in April, Carrie Little, Managing Broker of CarMarc Realty, went live on her personal Facebook page. Carrie did not put a lot of preparation into her video as it was not scripted, she was not wearing make-up, and her hair was not curled. Two years later, Carrie is still amazed that a two-minute video has earned her, to date, $53,654 from a $18 Facebook ad.
Facebook is ecstatic about the performance of Facebook Live videos. The social network has accumulated more than 3.5 billion live broadcasts since 2016, with the average daily utilization continuing to double year over year. A large portion of the human population has seen Facebook Live videos with the claim that nearly 2 billion people have watched a broadcast. Facebook Live is a live-streaming video service within Facebook that allows users to stream live video to their friends and followers. Video is popular, and Facebook alone has over 8 billion daily video views and 100 million hours of video watched every day making the social network a top player in the social media video landscape. In relation to real estate, Facebook Live allows REALTORS® to broadcast to the largest audience in the world and with the camera in your pocket. As of June of last year, there are 2 billion monthly active users on Facebook and over 1 billion daily active users There are currently 4 different places on Facebook where you can use the Facebook Live app: personal profile, business page, Facebook group and Facebook event. Terry Waggoner of F. C. Tucker said he had done a handful of videos on Facebook, and, as a result, his volume of listings has doubled in the last five months. Most of his videos are getting 10,000 to 20,000 views on average. Leigh Brown captured over 8,000 views on her virtual showing of a foreclosure listing using Facebook Live making the outlet a powerful way to capture more attention from your Facebook audience (most of whom probably aren’t seeing all your regular posts). The following are steps to take before you decide to go LIVE on Facebook. 1) Give a one-day notice before going live. Giving people the opportunity to plan
3) Charge your batteries! Streaming video will drain your battery. Charge your device and your additional batteries if you plan to use Facebook Live while on the go. Think about streaming video from your Open House or to provide an update on any property improvements. 4) Place your phone in Airplane Mode to eliminate unwanted interruptions due to notices and phone calls (you must use Wi-Fi if Airplane Mode is turned on). in advance and schedule your video into their day will help grow your audience. Your followers can receive notifications for when your videos will go live, so they can tune into your broadcasts and engage with you in real time. • Create a photo in Canva or another design software announcing your Facebook Live Broadcast. Tell people the date, time, and subject of your video or talk, and provide a link to the page that you will broadcast from. • Email an announcement of your upcoming video to your database and include a link to the page that you will broadcast from. • Promote your broadcast on Twitter using the photo you created in Canva. Resize the photo first to the platform where you plan to share the photo. • Pin the photo created in Canva to Pinterest. 2) Facebook won’t let you go live until it determines that you have a strong internet connection. Connect to a reliable Wi-Fi network when possible. A strong Wi-Fi connection is essential to having a continuous and uninterrupted video experience.
5) Check the lighting. 6) Use a tripod or selfie stick to stabilize the video. Keep it as level as possible. 7) Ask your audience questions and encourage them to participate. Adding a video to your website can increase the chance of a first-page Google result by up to 53x. Audiences are 10x more likely to engage with video content - embed, share, or comment - more than text-only blogs or a related social post.
Marki Lemons-Ryhal is dedicated to all things real estate. With over 25 years of marketing experience, Marki has taught REALTORS® how to earn up to a 2100% return on their marketing dollars. She was a featured speaker at the 2018 KYR Convention & Expo in Louisville from September 25-27. By consistently offering sound industry analysis and professional guidance, Marki’s expertise has been featured in Forbes, Washington Post, Homes.com, REALTOR® Magazine and has also been included on CBS News Chicago and CNBC. FALL 2018 | Kentucky REALTORS® | 27
CEO'S MESSAGE
Is your work as a REALTOR® a job, a career or your calling? STEVE STEVENS, CCE
CEO – KENTUCKY REALTORS
I
n Jonathan Haidt’s book The Happiness Hypothesis, he says that, “most people approach their work in one of three ways: as a Job, a Career or a Calling.” He goes on to talk about whether we do what we do just for the money or for the pursuit of goals that lead to something better (like professional advancement) OR if we work at something because it fulfills us due to our true belief that it contributes to a greater good. When I stopped to think about this over my own professional life, I found it difficult to place my work life neatly into just one of those buckets. For me, I think I have gone through the entire cycle. After college and a change of professions, which started as a job to me, my next endeavor eventually evolved into my career, as I attained higher levels of success. Over time, as the passion for what I was doing rose to a high level, working as an association management leader became my calling. There was tremendous satisfaction in helping businesses and communities succeed and I find that satisfaction amplified as I work with our 11,000 members as they seek to grow their own businesses and improve their communities in new and exciting ways. I have been lucky to ignite my passion and follow my calling in working with Kentucky REALTORS® and I hope to continue to learn and grow alongside our members. Chances are this same cycle may be how it played out for you too, as you embarked into professional real estate. When we all started out, we needed a job and a paycheck to make ends meet. There’s a pretty good chance you needed to work multiple jobs as a fledgling real estate
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professional just to accomplish this. Still, you pressed on because you thought having a real estate vocation had potential, was interesting and you might even make a few dollars at it along the way once you figured it all out. So, you invested in yourself and your professional education. Your knowledge, skills and perspectives expanded – and so did your paycheck! That’s when it was clear that real estate was no longer a job but had become a career. The more folks who crossed your path and became your clients, the more rewarding it became for you, as you helped them through life changing experiences like finding their first home or even securing their dream home. Soon, making more money or achieving a higher rank in your organization fell from being your top priorities — being surpassed by the personal gratification of serving others. When that moment came, it was the moment when real estate became your “calling”. So where are you now in this cycle? Perhaps the following questions can help you determine that: What is really important to you? Where do you devote your time? What’s your passion and what inspires you? Who are your heroes? Are you changing lives through your work? These important questions may also help you determine what true success looks like for you. I try to remind myself regularly what KYR’s mission is: “To support and enhance the ability of local associations of REALTORS® and REALTOR® members to succeed in their businesses in an ethical and competent manner and, through a united voice, preserve real property rights.” Knowing this helps me keep my priorities in line. We take this seriously and ours is a two-pronged “attack” in working for each of you and each of our associations every day. Is there a way for you to be engaged and involved in a new way in the coming year? Will you make it a point to stretch yourself and climb higher than before? If you do, you just might discover new meaning and purpose to your professional career and hopefully – your calling! We are here to help you in your quest so we hope you’ll let us know how we can.
UP TO CODE
6 Tips for Keeping Your Marketing Legal BY ERICA CHRISTOFFER
M
ake sure you aren’t inadvertently violating the Fair Housing Act or state and local fair housing laws with your Facebook ads. In light of allegations that Facebook enables housing discrimination by allowing real estate advertisers to exclude audiences protected under the Fair Housing Act, here are some tips for making sure your marketing on the social platform is legal and ethical.
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Never use targeted marketing that excludes a specific protected class on a listing, says NAR’s Deputy General Counsel Lesley Walker. You also can’t depend on Facebook as your only advertising tool because its algorithm does not guarantee that a broad section of the population will see your ad, even if your targeting isn’t exclusive. She says to put your listing in the MLS, on major real estate platforms like realtor.com®, and even in your local newspaper.
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Know your state and local fair housing laws, because they may include more protected classes than the federal Fair Housing Act. Make sure your marketing is in compliance with all of these laws.
For advertisers, Facebook has chosen not to protect advertisers from liability, says Rachel Goodman, staff attorney with the ACLU Racial Justice Program. “Although it will differ somewhat depending on facts and context, the general rule is that the user can always be liable and the platform will be liable in some, but not all, circumstances,” she says.
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Considering working with a digital marketing firm or hire an individual who can do this exclusively for your company. Digital marketing expert Nathan Dadosky says the advantage is having an expert who’s working in the ad manager to build campaigns daily. Digital marketers are more up-to-date on the changes Facebook makes, which are happening more frequently. It will also save you time. “Everyone has their zone of expertise and knows what they’re good at,” Dadosky says. “Leverage the expertise of someone else and focus on what you’re great at.”
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Even if your listing is on the MLS, it might not be visible to a segment of the market. If part of your market isn’t reached by the MLS, use other methods to reach those people, says Fred Underwood, NAR’s director of diversity and community outreach programs. “That’s a really important piece,” he says.
The Kentucky REALTORS® ensures the ethical behavior of its REALTOR® members through the professional standards process. KYR handles the administrative aspects of this process for many of the local associations in our state. Three of the 19 ethics complaints filed with KYR in 2017 charged REALTORS® with a possible violation of Article 12 which states: “Communicate honestly and present a true picture in your advertising, marketing and other public representations.” Of those three complaints, one REALTOR® was found in violation of Article 12 for failing to disclose their status as a real estate professional on a solicitation letter and envelope mailed to the complainant. One out of the thirteen ethics complaints filed with KYR in 2018 charged a REALTOR® with a violation of Article 12. The REALTOR® was found in
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If you see a post that could be a fair housing violation by someone else, don’t engage, comment, like it, or click on it. Get a screenshot and report it to your local association before it’s deleted, says Chicago-based managing broker and trainer Carrie Little.
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Brokers must require consistency in how agents market. For example, if one agent requests an “Equal Housing Opportunity” logo on their business card, then everyone in the office should have it, says Helena Grossberg, broker-owner of ALM Realty & Services Inc. in Miami. As a certified real estate instructor and member of Miami REALTORS®’ professional standards and grievance committees, she says this consistency must extend to social media as well. For example, Facebook recently changed the algorithm of its news feed, lessening the organic visibility of business pages. As a result, if agents start posting listings from their personal page on a regular basis, then all the rules of a business page still apply, Grossberg says, and agents should include their brokerage information. “As a broker, I will be watching with greater scrutiny,” she says.
Reprinted from REALTOR® Magazine, May – June 2018, with permission of the National Association of REALTORS®. Copyright 2018. All rights reserved.
violation of Article 12 for failing to disclose the name of their firm in a reasonable and readily apparent manner on their website. In both cases, the REALTORS® were required to complete ethics training in addition to the REALTOR® Code of Ethics training required by NAR every two years. A seller recently contacted KYR because they were not satisfied with the marketing and advertising of their home. A KYR Ombudsman was able to contact the listing agent and make them aware of the seller’s concerns. The listing agent was happy to take corrective action before the seller’s frustration escalated. Encourage your buyers and sellers to communicate honestly and openly with you. If needed, a trained KYR Ombudsman may be able to help facilitate that communication! FALL 2018 | Kentucky REALTORS® | 29
A DAY IN THE LIFE OF...
a Commissioner with the Kentucky Real Estate Commission
Lois Ann Disponett, CRS, CRB, GRI, Broker, Owner Lois Ann Disponett Real Estate Company
How many years have you been in real estate? I have been in the real estate business for 42 years. You own your own brokerage. When did you start that and what motivated you to take that step? It is something that I had always wanted to do. My dad started building and developing in 1965 so I had always been around construction and sales and fell in love with it and still love what I do every day. What did you do before real estate and how did you make the change? Real estate has been my career since day one. I graduated high school at 17 in 1975. I went to UK/LCC to obtain a degree in real estate. I got my license in August of 1976 and opened my own company in January of 1978. What are a few of the highlights you’ve experienced since you started in real estate? I have always loved working with people and putting them in homes! One thing that I have always been personally proud of was the fact that I built my first house when I was 16. I have worked with my husband, Todd Hyatt, side by side in the real estate business for the past 32 years, which believe it or not is a highlight. I have been fortunate to share the same office building with my mom and dad for my whole career. We have developed subdivisions, built commercial buildings and even built a hotel through the years and have done this together in the place that we love the most - Anderson County. The most recent highlight was when my daughter, Anna-Marie Hyatt, graduated from Campbellsville University and came to work in our office. What was the driving force behind wanting to be a Commissioner and how do you become chair of the Commission? Real estate has always been my passion and I began to think about wanting to become a Commissioner after my daughter started grade school. Real estate has been good to me, so I wanted to give back and hopefully be able to improve the profession and raise our standards. I was appointed chair in the Executive Order that was issued. What are a few of your main responsibilities as a Commissioner? Regulating, educating and protecting the public are some of the main responsibilities. We want our licensees to be prepared, educated, knowledgeable and professional, which makes handling the responsibilities much easier. 30 | kyrealtors.com
How do you juggle being an active real estate practitioner with the demands of the Commission? An absolutely wonderful staff. I am fortunate to have 5 licensed individuals in my office, all of which are employees, and they have worked for us for years. It is our goal, as a staff, to be able to cover effectively and efficiently when one of us is out of the office. They always knock it out of the park to cover for me in my absence. That is whether I am gone or on the phone multiple times a day with a question from another broker or agent. On the regulation side, what is the biggest challenge you see for agents and brokers? Education. While I agree the 48-hour postlicensing requirement is needed for new licensees, I think it is tough for that segment of agents just starting out and trying to make a living. The need for additional education for all licensees, especially those like me, is vital. The industry, regulations and people have changed through the years and we have to recognize that we must be knowledgeable about the profession that we are proud to be a part of and quality education is an important way for that to happen. What is the most important thing an agent or broker can do to help the Commission? Educate themselves first and then be proactive when they see things going on that are not professional or outside of the regulations. The Commission wants to hear the input from brokers and agents and that is why we started holding meetings at some of the state events. What is the single biggest issue that can cause an agent to lose his/her license? Fraud, felony charges and mishandling of escrow funds are the top three. What are some of the goals for the Commission going forward? In no particular order: clean up outdated regulations, improve our education and offerings, encourage PLE to be taken to apply towards designations, and limit the overall level of inactivity/escrow. Outside of business, what is your favorite pastime? I love to work in flowers. Freezing corn, tomatoes and other vegetables is something else I really enjoy along with spending time with my family and friends, especially during summer activities. What is the best advice you have ever received? It takes a lifetime to build your name and a second to ruin it.